Xifaxan isn’t the only one of Valeant’s products that’s underperforming. But the reason behind its underperformance is unique, CEO Joseph Papa maintains.
Earlier this month, the new Valeant chief attributed Xifaxan's slump to “sales force disruption” over the past 12 months--something the company says it’s been working to address by inserting a new leader and putting a bumped-up sales-force effort behind the med.
“We think that’s going to be an important part of the solution,” Papa told investors on the company’s Q1 conference call.
It’s certainly a different tune from the one Valeant was singing when it picked up the product. After agreeing to buy out North Carolina-based maker Salix Pharmaceuticals, then-CEO J. Michael Pearson--prone to job-chopping--extolled the virtues of Salix’ rep army as he promised to keep it intact.
“We believe these customer-facing roles have played and will play a huge role in the success of the company," he said.
Now, though, things are different. For one, just this April--amid the announcement of nearly 300 layoffs--Pearson announced that various parts of Valeant’s GI force would be merged, noting in a memo to employees that there could be “new opportunities for some of those affected to take on different roles within the company.”
As a result of all the hullaballoo around personnel--as well as shifts in strategy behind the product--Valeant knocked $390 million off its expected 2016 Xifaxan sales. other drugs, particularly in Valeant’s key dermatology unit, saw their forecasts slashed, too, but an unfavorable distribution agreement with Walgreens triggered much of that change.
The Canadian pharma says it's still optimistic that Xifaxan can make a comeback, especially considering that it boasts indications in both IBS-D and hepatic encephalopathy. For the latter alone, Valeant estimates the total market revenue opportunity in the U.S. checking in at more than $5 billion, Papa said on the call.
- see the call transcript
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